Environmental Harm Research Methodology

3rd Oct. 2023

How does Mindful Money identify companies causing Environmental Harm?

Environmental harm is a matter of paramount concern, encompassing a wide spectrum of issues, from deforestation and the use of highly hazardous pesticides to palm oil production, GMOs, and general environmental damage. When we harm the natural environment, we also cause harm to humans, from land conflict to pollution-related community health issues. At Mindful Money, we envision a world where the well-being of the planet is prioritised over profit. Our approach considers various dimensions of environmental harm, allowing investors to make informed choices that align with their values.

What is environmental harm and why should investors care?

Environmental harm encompasses a spectrum of activities and practices that pose severe threats to our planet's health and sustainability. These issues reach far beyond the environment, affecting various aspects of society and the well-being of future generations.

Deforestation, for example, disrupts vital forest ecosystems, releasing stored carbon into the atmosphere which exacerbates climate change, while simultaneously impeding our capacity to tackle climate change by limiting carbon storage. Moreover, it drives biodiversity loss, endangering species and making ecosystems less resilient to climate change, intensifying this destructive cycle. Highly hazardous pesticides harm terrestrial and aquatic ecosystems and contaminate water sources, while palm oil production often leads to deforestation and habitat destruction. GMOs can disrupt natural ecosystems by unintentionally spreading genes to wild relatives. Additionally, other forms of environmental damage, including pollution and chemical spills, jeopardise ecosystems, contaminate air and water, deplete natural resources, and threaten wildlife.

Beyond environmental consequences, these issues impact the global economy and human rights. Over half of the world's total Gross Domestic Product (GDP) relies moderately or highly on nature and its ecosystem services, affecting economic sectors like agriculture, fisheries, forestry, and tourism. Environmental damage can displace local communities and indigenous peoples, through land-grabbing activities to exploit commodities, while exposure to chemicals, toxins and pesticides can also cause both acute and chronic health effects in humans, including cancers and birth defects.

In a changing climate, many industries face risks to their business activities from extreme weather events and degradation of nature. Companies involved in environmental harm may also encounter regulatory scrutiny and reputational damage as society becomes more environmentally conscious. Ethical investors, seeking alignment with values promoting environmental sustainability and responsibility, should support companies dedicated to reducing environmental harm, not fueling it.

You can find out more about funds that don't invest in companies that commit environmental harm on our climate friendly funds page.

How does Mindful Money find and categorise these companies?

Using a range of credible sources and ongoing engagement with recent research, we maintain a comprehensive list of companies engaged in environmental harm. Mostly, we use a structured framework supported by data from Sustainalytics, a global screening service (covering 30,000 global companies), to collate and understand to what extent companies are involved in varying aspects of environmental harm, either by what their practices are or how much revenue they derive from such practices. This service also gathers public data from media and NGOs about specific on-off or ongoing events involving a company that has caused harm to the environment. To supplement this, we review decisions from major global responsible investors such as the NZ Super Fund and the Norwegian Pension Fund (NBIM), or NGOs such as Global Canopy’s Forest500.

In our definition of environmental harm, we categorise companies into sub-categories based on four critical issues: Deforestation, Highly Hazardous Pesticides, Palm Oil, GMOs, and Environmental Damage. If a company's practices align with more than one of these issues, they may be included in multiple sub-categories.

This comprehensive approach ensures we capture the diverse dimensions of environmental harm, empowering you to make mindful investment decisions that align with your values.

Further information on Mindful Money's overall methodology can be found here.


We consider companies that are involved in, or directly linked to through their supply chain, the act of deforestation or clearance of forest that is then converted to a non-forest use. These companies are primarily in the beef, soy, palm oil, paper and pulp, and agriculture industries that are directly involved in the operation of deforestation, while several food or agri-food companies are involved in deforestation through their direct suppliers. Even though many of the large companies in these industries have put strong deforestation policies in place for their own operations, they may still be linked to deforestation through their supply chains. Money's recent report on the role of New Zealand investors in global deforestation illustrates the profound impact of deforestation on both humanity and the planet, while spotlighting the major corporations fueling this devastation.

Company profile: Archer Daniels Midland (ADM) is a global agribusiness company involved in deforestation through its sourcing of commodities like soy, palm oil, and cocoa. As a major player in the global food and agriculture industry, ADM purchases raw materials from suppliers around the world, many of whom engage in deforestation to clear land for crop production. In 2020, ADM was one of several agribusiness companies that signed a statement pledging to stop sourcing soy from newly deforested areas in the Brazilian Amazon. However, the company continues to be linked to alleged deforestation and land-grabbing in the Brazilian Cerrado, a hugely biodiverse savannah and critical carbon sink.

Highly Hazardous Pesticides

We consider companies involved in the production or distribution of highly hazardous pesticides, according to the PAN (Pesticides Action Network) International List of Highly Hazardous Pesticides (HHP). These companies are linked to various industries, including agriculture, where the widespread use of these chemicals can lead to severe environmental and health consequences. Despite the use of 195 HHPs being banned in the European Union (EU) due to their hazardous properties, many EU-based companies continue to sell these products to countries with weaker regulations, resulting in serious environmental and health implications in these places.

Company profile: Bayer, a multinational pharmaceutical and chemical company, dominates the global pesticides market, with the sale of pesticides making up one-third of the company’s revenues in 2022. One of the most significant controversies surrounding Bayer is its acquisition of Monsanto, a company known for producing Roundup, a widely used herbicide containing glyphosate. Glyphosate has been linked to cancer, and Bayer has faced numerous lawsuits from individuals claiming that Roundup exposure caused their cancer. In some cases, Bayer has been ordered to pay significant settlements.

Our materiality threshold includes a >10% revenue threshold for the production and/or distribution of highly hazardous pesticides.

Palm Oil

Palm oil is one of the most efficient and widely used vegetable oils. It comes from the fruit of oil palm trees and many vast monocrop oil palm plantations have displaced tropical forests across Asia, Latin America and West Africa. We consider companies involved in the production or distribution of palm oil. These companies are directly associated with the palm oil industry, which has faced significant criticism for its role in deforestation and habitat destruction. Palm oil production often involves clearing forests to make way for palm plantations. While some major players in the palm oil sector have implemented robust sustainability policies within their own operations, the complex supply chains involved in palm oil production may still have links to deforestation.

Company profile: Astra International Tbk is an Indonesian conglomerate that operates in various sectors, including agribusiness. Astra Agro Lestari, a subsidiary of Astrea International, is one of the largest palm oil producers in Indonesia and has been accused of clearing large areas of forest and peatland to make way for palm oil plantations. The company has also been linked to large forest fires in Indonesia, which are often set intentionally to clear land for palm oil plantations and agriculture.

Our materiality threshold includes a >10% revenue threshold for the production and/or distribution of palm oil.


We consider companies involved in the development, cultivation or release of GMO (genetically modified organisms) plants and seeds, as well as the growth of genetically modified crops. These companies play a significant role in the agricultural industry, where the introduction of GMO crops has raised concerns about potential ecological consequences, including gene flow to wild plant relatives and disruptions in natural ecosystems. While some companies have taken steps to address these concerns and use GMOs responsibly, the widespread use of genetically modified crops highlights the need to carefully assess the ecological risks involved.

Company profile: Corteva Inc. is a provider of seed and crop protection solutions focused on the agriculture industry, mostly corn and soybean varieties. As well as the risk of gene flow to wild relatives and potential disruptions in natural ecosystems, there have been controversies surrounding the environmental and health impacts of Corteva’s GMO crops, including concerns about pesticide use and the development of resistance in pests and weeds. In recent years, Corteva, like other companies in the agrochemical industry, has been under scrutiny for its role in shaping agricultural practices and policies related to GMOs. The debate surrounding GMOs continues to be a complex and evolving issue, with ongoing discussions about the potential benefits and risks associated with these biotechnologies.

Our materiality threshold includes a >10% revenue threshold for GMO plants and seeds (development and growth).

Environmental Damage

We consider companies engaged in recent or ongoing cases of companies, through their products or operations, in environmental degradation. This subcategory encompasses a wide range of concerns, including companies that have caused environmental pollution, chemical spills, poor practices or construction projects that have led to habitat destruction. The mining of various minerals and resources, such as metals and fossil fuels, can also result in the displacement of communities and the disruption of fragile environments. These environmental degradation issues highlight the need for responsible corporate practices and adherence to stringent environmental regulations.

Company profile: Power Construction Corp of China Ltd.’s wholly owned subsidiary, Sinohydro Corp Ltd, is responsible for the construction and operation of the Batang Toru hydropower project in Indonesia. The project is located in a Key Biodiversity Area, which is also home to the critically endangered Tapanuli orangutan, whose habitat is being permanently destroyed as a result of the project.